Fox can’t put Bud Selig on witness stand, judge rules

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For the second time in the Dodgers’ bankruptcy proceedings, Bud Selig has avoided taking the witness stand.

Selig would have testified this week had the Dodgers and Major League Baseball not reached an agreement for Dodgers owner Frank McCourt to sell the team. With Fox Sports now fighting the Dodgers and their plan to sell their television rights along with the team, Fox wanted the commissioner to testify at a hearing next week.

However, in keeping that hearing to the narrow issue of whether the Dodgers should be allowed to sell those rights ahead of schedule, U.S. Bankruptcy Judge Kevin Gross ruled Wednesday that Selig, McCourt, MLB Executive Vice President Rob Manfred and two Dodgers executives would not have to testify. Each side will be allowed to call two media-industry experts.

Gross said the Dodgers would have the burden of proving why the team should not have to abide by its current contract with Fox.

Gross also denied Fox’s request that he hear its motion to dismiss the Dodgers from bankruptcy before deciding whether to grant the Dodgers permission to sell their television rights. The latter issue will be heard Dec. 7-8, with the dismissal issue set for Dec. 27.

Gross also set a Feb. 8 hearing to put a dollar figure on Fox’s potential damages from an early sale of the television rights, in the event he permits the sale.

The Dodgers’ current television contract forbids the team from negotiating with any other media outlets before Nov. 30, 2012. McCourt has agreed to sell the team by April 30, and his attorneys say the sale price would be maximized if potential buyers knew exactly how much television revenue would flow their way.

The Dodgers have reserved the right to halt the sale process if damages are deemed too great, and they have promised the buyer of the team could reject whatever television deal is negotiated now. The fundamental issue, according to Dodgers attorney Sidney Levinson, is how to maximize the Dodgers’ sale price. ‘This is Bankruptcy Law 101,’ Levinson said.

Levinson said a sale would benefit the Dodgers in part because more money might be available for free agents before the current Fox contract expires in 2013. Under the law, however, Levinson said the priorities are to repay creditors in full and then maximize value for the debtor.

‘Does it matter if a substantial portion of the benefit goes to Mr. McCourt directly?’ Gross asked.

‘I don’t think it does,’ Levinson said.

Fox attorney Gregory Werkheiser strongly disagreed, saying any ‘sophisticated buyers’ would project television rights for themselves rather than let McCourt negotiate a deal for them. Werkheiser also said the Dodgers could be liable for ‘massive’ damages that would threaten full repayment to creditors, although the Dodgers dispute that any significant damages would result, and the creditors’ committee has endorsed the early sale of television rights.

‘This is not going to make the team more valuable,’ Werkheiser said. ‘This is going to line Mr. McCourt’s pocket.’

At one point, Levinson said Fox had adopted a strategy to argue about McCourt personally rather than about the sale motion.

‘I have never had any evidence before me to make any finding of impropriety by Mr. McCourt,’ Gross said.

Later, Werkheiser reminded Gross that he had faulted McCourt earlier in the case for failing to disclose a conflict of interest.

‘I remember that,’ Gross said.

Werkheiser also questioned how Gross could proceed based on McCourt’s agreement to sell the team, which neither the Dodgers nor MLB have filed with the court.

MLB attorney Glenn Kurtz said the Dodgers should file the document. Levinson said MLB had agreed that the document should remain confidential and suggested Fox file a motion in order to see the agreement.

Levinson also criticized Fox for throwing a variety of legal strategies at the proverbial wall, all in an effort to jeopardize McCourt’s ability to sell the Dodgers by the April 30 deadline.

‘Their goal here is to run out the clock,’ Levinson said.

Werkheiser said he saw no reason why Fox should submit to a date in an agreement it has not even seen. The season already would have started, limiting the ability of a new owner to improve the team immediately.

Werkheiser also said history showed that a Bankruptcy Court sale in the middle of the season did not necessarily hurt a team.

The Texas Rangers were sold in Bankruptcy Court during the 2010 season and reached the World Series that fall. The sale of the Chicago Cubs was completed in Bankruptcy Court after the 2009 season.

‘I don’t think bankruptcy had anything to do with that,’ Werkheiser said. ‘They’ve never gone anywhere.’

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— Bill Shaikin